I was thinking of starting an image hosting service (like Image Avenue but not that big) as an extra service for my visitors to keep them comming back.
Will this be permitted by DreamHost as long the hosted pictures are legal by the law ?

Yes, that is permitted, but be careful about bandwidth consumption. While the posted values are like “guidelines”, DH does reserve the right to close your site if you excessively over these “guidelines.”

But im like 2 weeks member , so my bandwidth on the ‘$7,95’ pacakge is 1002 GB /month.
If i get between 600/800 GB /month as example, there musnt be a problem?
Im reading now a Wiki story about CPU minutes, and if i have not too much,that ok too seems to me ?

600/800 on the 1002 gb/month setup is fine. DH bandwidth allotments are so far out there, you’d have to be a warez or porn site to break them. lol
But, I’d keep an eye on it anyway, just to be sure. Don’t ignore the bandwidth thing, ever. It’s just common courtesy running on a shared server to keep your resources as low as possible.

CPU Minutes? You’ll get tagged for that if you’re constantly pegging the system. Don’t forget, you’re not the only user on this system. High CPU minutes is the same as high CPU usage. You don’t want that. You’re one of 15-20 people on the server. How would you like it if one of them other sites were pegging the system preventing your site from running smoothly? Keep that question in mind as you make the site.